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Most of you have encountered ad breaks when watching a show or movie. But many don’t realize that ads on traditional TVs and connected TVs differ. So what is connected TV advertising? How is it different, and how does it work? Find out all the answers below.
Connected TV advertising, or CTV advertising, refers to video ads delivered through internet-connected televisions or devices used to stream television content. These ads can appear within streaming apps and platforms on smart TVs, streaming sticks, gaming consoles, and similar devices.
This includes smart TVs and external plugins like Roku sticks, Amazon Fire TV, Apple TV, and Google Chromecast. Other devices like video game consoles and other digital media players that can watch web-based video on your screen are also considered as CTV.
To the viewer, a CTV ad looks and feels just like a classic television commercial. The core difference is that it arrives exclusively through an internet stream. You will typically encounter these as non-skippable video clips while streaming movies or shows on platforms like YouTube and Hulu, usually running anywhere from 15 to 30 seconds long.
CTV advertising delivers ads to individual households based on internet data. When a streaming app launches, the platform’s backend instantly matches your household profile with relevant brand campaigns built from personal data like zip code, streaming habits, and household interests.
As with other forms of advertising, the first important step is to identify the target audience. Advertisers need to know who they want to reach based on information such as location, household interests, shopping habits, and demographics. A clearly defined audience saves ad spend and ensures your ads are reaching people who are interested in your products.
Decide where video advertising appears. Advertisers can buy spots directly from streaming services, like Hulu, YouTube, or Peacock. Other options are automated software that bids for slots over a broad swath of streaming networks. This step enables brands to align their budget to the specific premium content their target audience loves to watch.
Once the ad is locked, the system works automatically during commercial breaks. When the targeted audience is watching a show, the streaming app sends a digital request to an ad server. In seconds, the server matches the profile of the viewer with the advertiser’s campaign and delivers the video commercial to the screen.
The final step is to monitor performance using real-time digital analytics. Exact data, such as how many people watch the video to completion and which streaming platforms contribute most, is available. Advertisers can also track if viewers visit the brand’s website or buy products after seeing the ad.
In traditional television advertising, commercials are broadcast simultaneously to every single household. Advertisers buy ad slots on specific networks during specific time slots. For example, if an advertiser buys an ad slot during a live sporting event, anyone watching that event will see the same advertising.
With connected TV advertising, ads are more focused on a one-to-one basis. Video broadcast is based on the specific interests of the individual. For example, two neighbors watching the same show can experience different commercial breaks.
Which advertising is better depends on the goals of each marketer. Traditional advertising is an excellent choice for brands looking to increase awareness. However, it offers little customization and typically requires a larger upfront budget. Connected TV advertising provides highly targeted ad tools, ideal for businesses looking to maximize budget and target a precise customer profile with easy tracking ability.
OTT stands for Over-The-Top. It is the method by which content is delivered over the internet. A Connected TV, on the other hand, is the actual device or screen that is used to watch videos. An example of OTT is apps like Netflix, Disney, Prime Video, etc.
You will only find connected TV ads on internet-based streaming services and applications, never on traditional cable networks. Specifically, these spots run across streaming TV apps, live-streaming channels, ad-supported subscription tiers, video-on-demand services, and FAST platforms.
FAST, or Free Ad-supported Streaming TV, are channels that are free to watch, like Pluto TV and Roku channel. These channels look and feel the same as traditional cable TV, but it entirely works on the internet. They provide live and pre-scheduled programs instead of specific shows on demand.
Geographic targeting focuses on precise physical location. Advertisers can buy spots based on where an audience lives, narrowing parameters down to specific states, cities, or even individual zip codes. It is incredibly useful for local storefronts trying to reach nearby neighborhoods.
Demographics are customer information like age, gender, household income, education level, and parental status. By filtering the target audience by demographics, businesses can position their brands to people who are likely to become customers. For example, a luxury clothing brand targeting ads to high-income households.
Behavioral targeting means tracking users’ digital footprints, focusing on their top web destinations, purchase history, and hobbies. Businesses can then use this information to create ads that match what consumers want. One example is a user who has been looking at travel deals to Europe, the CTV system can serve ads that specifically offer packages to Europe the next time they stream on tv.
This involves a business using its own customer lists to build custom audiences for direct retargeting. Companies can take their existing email databases or phone directories and match them securely against streaming account databases. This lets a brand run commercials directly for past buyers or people who left items sitting in an online shopping cart.
Contextual targeting matches ads to a specific genre or theme. For example, ads can run on CTV during sporting events, true-crime documentaries, or travel shows. This method lets advertisers create highly relevant ads for users while they are watching. For example, showing ads about a home renovation during home improvement shows.
CTV advertising has the feel of a traditional living room television screen along with laser-focused modern digital targeting. This combination produces highly effective ad tools that can reach a specific target audience with high relevance.
Younger, affluent, and highly engaged audiences are actively watching on CTV and streaming apps. CTV advertising is the best way to reach these streaming-first audiences, delivering your message where they already spend time on apps like Hulu and YouTube.
CTV ads boast exceptionally high video completion rates. Unlike ads on websites and phones, where users can skip or scroll past, CTV ads run seamlessly during commercial breaks in movies or shows, when viewers expect them. As a result, most users sit through 15-30 second video ads.
Connected TV advertising offers much easier, more accurate tracking. Whereas traditional TV ads rely on guesswork and broad estimates to measure success, CTV ads provide precise, real-time data analytics. Advertisers can easily monitor performance, track ROI, and develop strategies to improve ads and targeting.
CTV ads are much more flexible than traditional TV advertising. Traditional TV advertising reaches the entire market, which can be wasteful if the business serves only a small radius. CTV ads allow brands to choose where they want to show their ads. It’s a more targeted, cost-effective, and highly relevant way to reach the audience.
Automotive businesses can benefit greatly from CTV advertising because buying a vehicle is a highly visual, trust-building decision. With geographic and demographic targeting, local dealerships can reach communities that meet specific income requirements. This way, local auto businesses can grow their name and build trust on a budget that fits their monthly ad spend.
Timing and placement are crucial for roofing contractors, home renovation companies, and HVAC technicians. CTV ads enable these sectors to zero in on neighborhoods with older homes or run local campaigns after severe weather. The demographic data and location are used to send the ads to the target audience that is most likely to need the service.
Online shopping can use connected TV ads to create a seamless shopping experience. Using behavioral targeting, brands can target viewers watching a fashion TV show and provide on-screen QR codes that take them directly to the product page, letting them complete the purchase without ever pausing the show.
Law firms and financial advisors naturally need intricate, detailed information in their advertising to explain their services to customers. As opposed to billboard or radio advertising, where there’s little space for such explanation, CTV advertising provides a medium to create 15- 30-second engaging videos about the services. With behavioral targeting, firms can ensure their ads reach only viewers who have actively researched financial or legal options online.
Live concerts, sporting events, and local festivals often need to create excitement before the event launches. CTV ads offer a great opportunity for organizers to run a high-energy and high-definition video showcasing the event to music lovers and local fans. Using real-time data tracking, event marketers can track ticket sales and shift budget to different streaming apps to maximize results before the event starts.
Impressions are the total number of times the ads were successfully loaded and streamed. This metric is important because it shows how often your ads made it in front of the audience. A good impression confirms that your budget is spent on ads that are running during commercial breaks on the chosen streaming apps.
While impressions are the total number of views, reach is the number of unique households that saw the commercial. For example, if your ad has 10,000 impressions, those views might have gone to 10,000 different homes, or they could have been shown multiple times to a smaller group of 2,500 homes.
Frequency is how many times an individual household watches the commercial during the campaign. While repetition is essential, showing ads too many times to the same group may cause viewer fatigue and waste advertising budget. Monitor frequency to find the right formula where people remember your business without getting annoyed by your commercial.
Cost per Mille – The cost of every 1,000 digital impressions your ad gets. By monitoring CPM, you can compare costs across streaming channels and target audiences, then shift your budget to the channels that deliver the best results for you.
CTV is part of the wider digital marketing ecosystem that includes websites. The system can follow IP addresses to see if someone is watching ads on their TV and then immediately opens a browser on their phone or laptop to visit your website. This helps see how effective the ads are in driving consumers to the site.
Conversion is the ultimate measure of success for the campaign. This metric shows the number of people who saw your ad and then took a high-value action for your business. Tracking conversions gives you the real number of revenue the campaign is generating.
Mixing CTV with traditional TV provides the widest possible audience. Traditional TV effectively reaches older audiences, while CTV helps capture younger cord-cutters who only stream.
This combination bridges the gap between building awareness and closing a sale. A premium CTV commercial gets people interested while they relax on the couch. When using their phones to search for services, your Google search ads are right there to grab their attention and secure the lead.
Nowadays, most people use their phones, browsing on their social media while also watching TV. This is a great opportunity to use both CTV + Social media. Run matching ads on platforms like Instagram or TikTok at the same time your CTV ad airs. It may catch viewers in a highly interactive mood, making them much more likely to click through and buy.
Pairing TV spots with audio ads on Spotify or local radio extends your brand recall into different parts of the day. A customer who watches your commercial at night will hear your matching jingle during their morning commute. It keeps your business embedded in their mind whether they are watching or listening.
Best for local businesses looking to maximize local visibility and build trust. With CTV and outdoor advertising, audiences who watch CTV ads at home and then drive past a billboard are more likely to remember your business when they finally need your services.
Begin your CTV advertising today, and reach streaming audiences with Nartak Media Group.
